Key People

Louis XVI - French
king of the Bourbon dynasty who took the throne in 1774; inherited
massive debt problems but was unable to fix them

Marie-Antoinette - Wife of Louis XVI, whose self-indulgent tendencies
became a symbol of royal excess and extravagance

Charles de Calonne - Controller general of finances appointed by Louis
XVI in 1783; recommended
across-the-board taxation as the only way to salvage France’s dire
financial situation

The French Monarchy and Parlements

The French royalty in the years prior to the French Revolution
were a study in corruption and excess. France had long subscribed
to the idea of divine right, which maintained that
kings were selected by God and thus perpetually entitled to the
throne. This doctrine resulted in a system of absolute rule and
provided the commoners with absolutely no input into the governance
of their country.

In addition, there was no universal law in France
at the time. Rather, laws varied by region and were enforced by
the local parlements (provincial judicial boards),
guilds, or religious groups. Moreover, each of those sovereign
courts had to approve any royal decrees by the king if these decrees
were to come into effect. As a result, the king was virtually powerless
to do anything that would have a negative effect on any regional
government. Ironically, this “checks and balances” system operated
in a government rife with corruption and operating without the support
of the majority.

Power Abuses and Unfair Taxation

The monarchs of the Bourbon dynasty, the
French nobility, and the clergy became increasingly egregious in
their abuses of power in the late 1700s.
They bound the French peasantry into compromising feudal obligations
and refused to contribute any tax revenue to the French
government. This blatantly unfair taxation arrangement did little
to endear the aristocracy to the common people.

France’s Debt Problems

A number of ill-advised financial maneuvers
in the late 1700s worsened
the financial situation of the already cash-strapped French government.
France’s prolonged involvement in the Seven Years’ War of 1756–1763 drained
the treasury, as did the country’s participation in the American
Revolution of 1775–1783. Aggravating
the situation was the fact that the government had a sizable army
and navy to maintain, which was an expenditure of particular importance
during those volatile times. Moreover, in the typical indulgent
fashion that so irked the common folk, mammoth costs associated
with the upkeep of King Louis XVI’s extravagant palace
at Versailles and the frivolous spending of the queen, Marie-Antoinette,
did little to relieve the growing debt. These decades of fiscal
irresponsibility were one of the primary factors that led to the
French Revolution. France had long been recognized as a prosperous
country, and were it not for its involvement in costly wars and
its aristocracy’s extravagant spending, it might have remained one.

Charles de Calonne

Finally, in the early 1780s,
France realized that it had to address the problem, and fast. First,
Louis XVI appointed Charles de Calonne controller general
of finances in 1783.
Then, in 1786,
the French government, worried about unrest should it to try to
raise taxes on the peasants, yet reluctant to ask the nobles for
money, approached various European banks in search of a loan. By
that point, however, most of Europe knew the depth of France’s financial
woes, so the country found itself with no credibility.

Louis XVI asked Calonne to evaluate the situation
and propose a solution. Charged with auditing all of the royal accounts
and records, Calonne found a financial system in shambles. Independent
accountants had been put in charge of various tasks regarding the
acquisition and distribution of government funds, which made the
tracking of such transactions very difficult. Furthermore, the arrangement
had left the door wide open to corruption, enabling many of the
accountants to dip into government funds for their own use. As for
raising new money, the only system in place was taxation.
At the time, however, taxation only applied to peasants. The nobility
were tax-exempt, and the parlementswould never
agree to across-the-board tax increases.